Industry analysts were upbeat when faced with Oracle's fourth quarter applications sales last week, as the company reported a 52 percent increase in software revenue compared to the same period last year.
However, after further review, at least one industry watcher said that the $350 million in Q4 applications sales delivered by the company may not be as impressive as it initially seemed, particularly in light of the fact that Oracle's revenue total included all the software sales it was able to add after completing its acquisition of rival PeopleSoft.
According to Ray Wang, analyst with Cambridge, Mass.-based Forrester Research, Oracle's application licenses revenues of $350 million were up from its $231 million in sales for fourth quarter 2004, but still totaled less than the sum of Oracle and PeopleSoft's license revenues for that quarter, which totaled $361 million.
Wang pointed out that Oracle is on track to record some $4.8 billion in total applications revenue in 2005, representing a solid gain off of the $2.45 billion in software sales that it reported for 2004. But, the analyst pointed out that the number still comes up well short of the $5.1 billion in applications revenues that Oracle and PeopleSoft combined for last year.
"The bad news is that Oracle so far made 2.5 and 2.6 add up to less than 5," said Wang in an e-mail. "The good news is that it didn't lose more ground through the acquisition, and is likely to make up some of the ground that it lost."
Yet, Wang said that Oracle still ranks "way behind SAP," who he expects to report 2005 applications revenue growth of almost $1 billion.